Following unusually chilly weather in Texas during the heart of winter, natural gas storage levels in the South Central flipped to steep deficits relative to historic norms. However, with the early onset of spring this month, including strong wind generation that lessened gas needs, utilities in the region began to aggressively rebuild inventories.
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Whether this becomes a trend or not, analysts said, depends heavily on mild temperatures and windy conditions enduring through the spring. The potential for an early, hot summer that sends gas-for-cooling demand soaring is the wild card.
“Recent history would suggest it’s probably not wise to bet against a hot summer,” StoneX Financial Inc.’s Thomas Saal, senior vice president of energy, told NGI.